Legal Alerts

Changes could have a significant impact on existing benefit programs

The IRS issued a new notice on Wednesday that provides guidance regarding aspects of Affordable Care Act implementation. The following are addressed by Notice 2015-87:

• Application of ACA market reform requirements to various types of employer health care arrangements, including health reimbursement arrangements and employer payment plans;
• Determination of employee contribution amounts for purposes of Internal Revenue Code section 4980H (the “pay-or-play” rules) when employers offer HRAs, flex credits or opt-out payments;
• Adjustment of base amounts for affordability and pay-or-play penalties;
• Determination of an employee’s full-time status for purposes of the pay-or-play rules;
• Determination of applicable large employer controlled groups for governmental entities;
• Application of COBRA continuation coverage rules to health flexible spending arrangements that include carryover provisions; and

Availability of transition relief from penalties for incorrect or incomplete employer reporting in 2016.Additionally, Congress passed its omnibus spending bill on Friday, which would postpone the implementation of the Cadillac Tax until 2020 if signed by President Obama. BB&K will issue further information on the status of the postponement as it becomes available.

This new guidance may be of consequence to your benefit arrangements. If you need more detail regarding how this guidance impacts your arrangement, please contact one of the authors of this Legal Alert listed at right in the firm’s Employee Benefits practice group, or your BB&K attorney.

Disclaimer: BB&K legal alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.